EXECUTIVE OUTLOOK

These are times of unexpected change, unusual partnerships and high demand for helicopters and those who make them, support them and fly them. To decipher what all this means for the Industry going forward, we asked top Industry executives the following question:

"What specific trends to you anticipate In the helicopter Industry In 2006, and what effects will they have on the Industry?"

Precision Heliparts, Inc.:

"2006 Will be an Excellent Year"

2005 was incredible; our revenues almost doubled. 2006 looks to be even better. We have contracts in place from 2005 to support large civilian fleet operators, and now we're picking up military work as well.

Overall, flying is up, so that explains much of the activity. But for the first time, we think the Internet is seriously impacting our business. Our web site showed a substantial increase in the number of "hits" this year, especially international inquiries. Since almost 50 percent of our business is international, this produces noticeable results. In the past, most international operators tended to deal with U.S. suppliers through brokers--in classic economic terms, they had "imperfect market knowledge." The Internet has changed that. Now the international operator can go on line, locate U.S. sources directly, and bypass the old intermediaries.

Scott James, Founder and Partner
Precision Heliparts, Inc.

Simplex Manufacturing:

"Many Reasons to Celebrate 2006"

There are many reasons to celebrate this year. First, it is our 60th anniversary, and we'll be celebrating our tradition and legacy of excellence at Heli-Expo and throughout the year. We're also enthusiastic about our business results--2005 was a record year for Simplex, with a 40-percent growth increase over 2004 and a healthy mix of domestic and international customers. More than 1,500 Simplex systems are operating worldwide, and Simplex supports more helicopter platforms for firefighting systems than anyone else in the world. Our focus on innovation is strong. Simplex is providing engineering services to Heavy Lift Helicopters for the CH-53 Fire Stallion and we have also developed a new, variable flow-rate firefighting system for the Kamov Ka-32 helicopter. We have also been involved in product development, creating firefighting, spray and police systems for the Kazan Ansat helicopter. The future is bright. We are expanding into new markets, and now offer helicopter equipment for the power-line maintenance mission. I fully expect another outstanding year in 2006.

It is Turbomeca's primary objective to remain the world's leader in helicopter propulsion. Our strategy is simple; provide airframe manufacturers with more performance options backed by a strong global network of product support.

Last year, we observed a record growth in orders. This increase in orders for new engines and support was very significant. Turbomeca is fully committed to meet and conquer the challenges we are facing today in order to provide our customers the best support.

We are currently implementing a radical revolution in our key activities. We are changing our organization and our mindsets in terms of support, quality and industrialization, to fulfill and anticipate our customers future support needs.

The Turbomeca USA Americanization Program was launched in the first quarter of 2005 with the purpose of establishing resources for North American sourcing. As a result, we doubled the number of engines assembled and tested at TMUSA and increased (and will continue to increase) the U.S. content of the Arriel family and Arrius 2 engines. The first Arriel 1E2, which will be powering the EC145, was assembled at TMUSA in October.

To provide more resources and support closer to customers, we opened a new TurboSupport Center in Scott, La. in June. And yet another step is the new Arriel 2 repair activity at Turbomeca Canada.

At Turbomeca, we consider it a priority to put our resources closer to our customers.

Emeric d'Arcimoles, Chairman and CEO
Turbomeca

Wulfsberg Electronics:

"Interoperable Communications a Must"

The hurricanes of 2005 have once again shown that helicopters are instrumental in the success of first responders. However, if those aircraft do not have communication systems capable of interoperating with other first responders, mission success is largely left to chance.

Hurricane Katrina brought to light the need for every aircraft--military, federal, local, Coast Guard, and even civilian--to coordinate with one other. Once again, after the experts analyzed the responses of the various public-service organizations, the lack of interoperable communications was the No. 1 issue early in the disaster.

Katrina also showed that while an aircraft may have the ideal communication system for its day-to-day operations, that same system becomes substandard in case of a disaster that requires the aircraft to move to a different region with different communication systems.

Wulfsberg Electronics has been providing tactical aircraft communication systems for more than 30 years. Our RT-5000 is the only multi-band tactical radio with the interoperability to allow all responders to communicate for an effective, coordinated response.

Scott Hovelsrud
Product Manager, Tactical Radio Products

Center Capital Corp.:

"Core Markets Should Remain Strong"

On the heels of a robust 2005, we are optimistic the U.S. commercial helicopter market will continue to exhibit favorable trends in 2006. Sales of new and pre-owned helicopters have outpaced the five-year average, both in the turbine and piston markets. Broad market demand for pre-owned helicopters should continue in 2006, maintaining strong and stable collateral-value conditions. We are optimistic that the core market segments Center Capital serves--Corporate and Personal Transport, Air Medical, Offshore Oil and Gas, Utility and Charter, and Sightseeing--should remain relatively strong in 2006.

Center Capital continues to establish itself as one of the premier dedicated direct lenders to the U.S. commercial helicopter marketplace. As further evidence of our commitment to this market, we added to our team Jim Pulie, a 17-year helicopter industry veteran whose career started at Sikorsky Aircraft. With the backing of our parent, Webster Financial (NYSE: WBS), we intend to continue to leverage our industry experience and financial capacity. We value the relationships we are fortunate enough to establish and have been rewarded with an unusually high rate of repeat business.

Jim Pulie, the General Aviation Division support team and the rest of us at Center Capital look forward to the coming year with great optimism.

While the Defense segment of the rotorcraft industry pioneered the use of night-vision goggles (NVGs), the use of goggles on the civil side is just beginning to take hold. Lessons learned by the military will be applied to civil operators where appropriate. The use of NVGs in civil rotorcraft will strengthen the industry as applications increase, requiring additional assets.

For more than 20 years, Hoffman Engineering has been an important participant in the integration of NVGs into aircraft crew stations. As EMS, Police and other operators adopt this useful technology, Hoffman will be there with products and services, just as we were there for the military.

Widely known for image intensifier and NVG test equipment, Hoffman also provides lighting and filter solutions to a worldwide market. Additionally, our company offers a wide variety of instruments to assist in assuring continued safe operations through use of inspection scopes and instruments capable of accurately reading starlight values.

Andrew Sadlon, President
Hoffman Engineering Corp.

DynCorp International

"A Strong Future for the Helicopter"

Changes in warfare, increased urbanization, and the need for quick, flexible response to natural disasters, medical emergencies, and search-and-rescue situations are just a few of the factors that give the helicopter a strong future. I don't think anyone knows helicopters better than DynCorp International. We've been caring for them and re-engineering them for nearly 60 years, and we plan to be a big part of the helicopter's future.

We have always been a very innovative company, but this is a particularly exciting time for us. We are moving into new fields where we can take advantage of a can-do corporate ethic, an absolute dedication to the customer, and nearly 60 years' experience in aviation, logistics, and project management worldwide. Just watch us.

Stephen J. Cannon, President and CEO
DynCorp International

Aviation Instrument Services:

"Another Year of Growth"

I expect 2006 to be another year of growth for the helicopter industry. The continuing demand for rotorcraft for homeland security, military missions, air medical services, and corporate use bodes well for all of us. So, too, does the need for components and instruments, and the commerce in these items in the general aviation industry.

Since 1977, Aviation Instrument Services has met this demand with one goal in mind: To build a reputation of excellence in service. This is why Aviation Instrument Services has evolved into a company that sells and exchanges instruments for general aviation aircraft and helicopters, and manages consignment sales from various customers including the handling of component repairs and overhauls. AIS also assists several overseas customers with their purchasing of all types of items in the United States.

We believe that the U.S. turbine helicopter commercial market will continue to be very strong in 2006, with the largest growth in the air medical services and offshore segments. The air medical services market is continuing to grow rapidly, together with high demand for replacement aircraft. Offshore has been booming recently: high oil prices are expected to drive the expansion of deep-water exploration and thus create even more demand for helicopters.

The impacts from Hurricanes Katrina and Rita have highlighted the importance of helicopters in responding to catastrophic events as well as more and more missions required to protect the American public. Overall, the future looks bright and production will significantly increase, as will investment in development of new aircraft.

Companies providing repair and overhaul services will feel increasing pressure to respond to globalization of fleets. Operating globally near the customer is important to become the preferred supplier. Responding to larger fleets will challenge service providers to provision effectively to meet the requirements of customers, who will operate in very competitive environments. The emphasis will not only be spares provisioning but lease and exchange pools as operators will not be able to increase their spare pools. Consequently, reducing the time to return a unit to service will be imperative to the customer and determine which MRO companies will distinguish themselves from the competition.

Michael Topa, President
Composite Technology, Inc.

Goodrich Hoist & Winch:

"New Platforms, Expanded Service Capabilities"

For Goodrich Hoist & Winch, 2006 is set to be a very exciting year. With new rescue hoists being fielded across platforms such as the S-92, V-22, EC225 and NH90, we are extremely well positioned for continued business growth. New platforms are being equipped with the latest technology, high-speed electric hoists with operational speeds of 350 ft./min., continuous duty cycles and EMI capability compliant with the latest ADS 37A standard. Each of these new products is certifiable to the latest JAR/FAR requirements and will herald a new era of rescue-hoist performance.

Also exciting in 2006 is the continued expansion of the Goodrich Hoist & Winch service capability. We are expanding our field service network and growing our repair capability in order to better serve our customers in the all-important aspect of mission availability. With the Goodrich three-year warranty and 10-year time between overhaul, our aim is to ensure that the rescue community is ready to save lives.

Steven Loye, Vice President & General Manager
Goodrich Hoist & Winch

Heli-Dyne Systems:

"Continuation of Growth for 2006"

The helicopter industry will continue to expand in all areas of operations. The key for all vendors and suppliers will be to meet your current obligations and grow your business to meet this increasing need. Our success, as well as many other companies in this industry, will depend on how well we manage these two business objectives.

Some of the factors that will affect the manufacturing, integration, or support derived from the increased helicopter activities are material availabilities and the retention and attraction of talent. From Heli-Dyne's standpoint, these two items have the most relevance when meeting the aforementioned business objectives.

Equipment and materials, such as aircraft-grade aluminum, has become more scarce and pricy. Failure to stay on top of this basic activity will result in cost overruns and potentially unhappy customers. Talented engineers, experienced technicians, and good business managers are scarce. If you are fortunate enough to have these people in your company, you will have to pay more to keep them.

David R. Horton, President
Heli-Dyne Systems

Avalex Technologies:

"A Continuous Pursuit of Innovation

Avalex has achieved success in its markets with a continuous pursuit of innovation. Our most recent product introduction, the ACS6100, brings a fusion of engineering prowess and visionary features to any airborne FLIR sensor with the breakthrough capabilities of Geopoint and Geohold. For the first time in the legacy airborne sensor market, operators can now point their sensor at a target and keep it locked in place without intervention.

In the next year, Avalex and its affiliate companies will continue to introduce technologically advanced products to the airborne surveillance market. Our company has grown from one product line, displays, to five distinct lines offering numerous options to special-mission operators.

Our passion for providing new, advanced products to the airborne market will only continue to grow with the continued success of our products.

Tad Ihns, President
Avalex Technologies

Enstrom Helicopter:

"Increased demand and opportunities in new markets"

2005 saw an increase in sales and production of 30 percent due to our ability to open new markets and continued network growth. With the introduction of our helicopters into Korea, Georgia, and Slovenia we have surpassed the 45 country milestone.

We recognize that the U.S. police market is strong and will continue to grow through 2006. To support that growth, we showcased our turbine police capability by investing in a demo tour from coast to coast, giving the aviation units the opportunity to experience the stability, visibility and affordability of our aircraft.

With the emerging helicopter market in Asia, we see the need for trained pilots growing rapidly. Therefore, we are pleased to be selected as the training helicopter for Hanseo University in Korea, and well positioned to support the market.

For 46 years, Enstrom has provided and continues to provide a dependable and quality product to our customers. The entire Enstrom team is optimistic as we approach the New Year and look forward to seeing Enstrom helicopters world wide.

Jerry M. Mullins
President and CEO

OuterLink Corporation:

"Operations Demand Communications, Flight Following"

As has been amply demonstrated over the past few months, the helicopter industry is a key ingredient of our national system for public safety and security. As helicopter operations continue to expand further offshore, as helicopter support of response to disasters such as Katrina, as threats of terrorism continue to plague our scheduled airline system, all of these operational demands create additional demands for dependable, real-time communications and flight following. The innovative applications of data messaging and flight tracking by the HEMS industry are also providing new ideas for military air ambulance applications, especially in Patient Management systems. The next few years will see further innovations in the application of data communications for safety of flight and for improved productivity and value to the operators.

Paul F. Newcomb
Founder & President

Aviall:

"At Home and Abroad, the Helicopter's a Front-Line Vehicle"

The events of 2005, including Hurricanes Katrina and Rita and the continued conflict in the Middle East, vividly illustrate the importance and usefulness of rotary-wing aircraft. As helicopter operators in the U.S. region of the Gulf of Mexico significantly increased their flying hours after the hurricanes, Aviall tried to support our customers, including those in the oil industry, in a sincere effort to aid in recovery and rebuilding. These events showcased the capabilities of rotary-wing aircraft in personnel rescues, material delivery and emergency evacuations. The continued involvement by the U.S. in Iraq and Afghanistan also validates the helicopter as a front-line vehicle for military expeditionary forces.

Aviall's LIFT program provides helicopter companies with a single-source, customized solution for stocking, managing and ordering parts. Thanks to programs such as LIFT, we have grown from a $400-million company in 2000 to one approaching $1.5 billion today. We are also attempting to add additional OEM product lines to our offerings and to negotiate exclusive agreements with suppliers and customers wherever we can. Aviall remains dedicated to delivering value to our customers and suppliers in everything we do, as evidenced by the events of 2005.

Dan Komnenovich, President and COO
Aviall Services, Inc.

Aerospace Filtration Systems:

"Provide Operators Hardware That Fits Their Needs"

In 2005, helicopter operators let industry know what they require: Our job is to meet their needs with products that provide value. AFS filter systems deliver increased performance and reduced life-cycle costs, two critical characteristics operators demand. The key to our success is solid engineering, backed by the best possible customer support, and a positive economic impact for operators. Helicopters equipped with AFS filters operating in Southwest Asia have withstood challenging environmental conditions despite a high combat operating tempo. Customers who see the value we provide to these aircraft, and to others operating around the world, will invest in filtration technology in the future. Our mission moving forward is to expand the technology to more platforms so that even more commercial operators can reap the benefits they provide. In 2006, we will offer more systems on more platforms to meet operators' demands, and if the value is obvious, they will continue to invest in our products.

Michael Scimone, President
Aerospace Filtration Systems

Kaman Aerospace:

"Well Positioned for the Future"

Although Rotor & Wing's readership knows us for our helicopter products, Kaman Aerospace is also a leading manufacturer of safe, arm and fuzing devices for missiles and bombs, rugged-environment mass-memory systems, precision measuring devices and electro-optic systems. Business is strong, and our Helicopters Division is well positioned for the future with four key programs, including the BURRO+, K-MAX (including FIREMAX) and Seasprite helicopters, and Subcontracting services. Each of these distinct products appeals to different market segments, and each benefits from Kaman's experience and focus on innovation. Our Subcontracting business is growing rapidly as leading manufacturers turn to us for quality assemblies, parts, and more. The BURRO+ unmanned aerial system is earning respect among military customers for the unprecedented capabilities it will bring to battlefield logistics missions. K-MAX helicopters are operating in 10 countries and growing in popularity for their vertical lift capabilities, and the FIREMAX, with its unique tank, is bringing a new and necessary tool to aerial firefighters. We're looking forward to another excellent year of growth and new opportunities.

Sal Bordonaro, President, Helicopters Division
Kaman Aerospace

Keystone Helicopter:

"Greater Focus on Quality, Service, Value"

For the future, we will demand of ourselves even greater focus on quality, service and value. The helicopter market will be robust and new, technology-driven safety features such as EGPWS, CVR/FDR, night-vision and enhanced vision devices will be in great demand for both the new and retro fit aircraft market.

We intend to lead the market in the development and integration of these kinds of products and systems. The bottom line: At Keystone Helicopter we demand of ourselves even greater focus on quality, service and value.

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